Tokyo rubber futures remained on a downward trend despite the Japanese Nikkei 225 index improved, and the yen fluctuated in a narrow range against the dollar during the week. In the meantime, crude oil futures on New York Mercantile Exchange also rose during the week.
In contrast, Shanghai rubber futures improved steadily throughout the week as sentiments were buoyant by a sharp improvement in Chinese manufacturing activity in May, the news on the fall of rubber inventories monitored by the Shanghai Futures Exchange to their lowest levels since last December at 163,097 tons, the Chinese plans to subsidize local auto makers worth more than $700 million a year, and positive comments about interest rates from the U.S. Federal Reserve later in the week.
On the physical front, Thai, Indonesian and Malaysian NR prices showed marginal rises during the week and ended higher on Friday comparing with their settlement prices on an earlier Friday mainly due to steady demand from tire manufacturers, especially from China, and the sentiment improved on rubber futures.
Furthermore, the disposal of Thai natural rubber stockpiles amounting to 200,000 tons at this moment is unlikely as implementation of mega-projects have to be approved by the National Council for Peace and Order (NCPO) under the Royal Thai Army only.
– IRCo
